# M/S Ganesh Anhydride Ltd & Ors v. Addl. Chief Judicial Magistrate & Anr

- **Citation:** (2019) 4 ILRA 139
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2019-07-03
- **Case number:** Crl. Misc. Application (U/S 482 Cr. P.C.) No. 14529 of 2004
- **Bench:** Sudhir Agarwal
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-ganesh-anhydride-ltd-ors-v-addl-chief-judicial-magistrate-anr-44920
- **Pages:** 3

## Headnote

Law
-
Negotiable
Instruments Act, 1981- Sections 138,
141 & 142 read with Indian Penal Code,
1860 - Section 420 - The mere fact that
cheque is for a higher amount, will not
dilute the liability of drawer to the
extent
of
amount
which
was
for
discharge of "due debt" or "liability"
stood dishonoured. It cannot be said that
non encashment of cheque to the extent
it was for discharge of due debt and
liability would not come within the
purview of Section 138 of Act, 1981.

Application u/s 482 Cr.P.C rejected. (E-2)

List of cases cited: -

## Text

4 All. M/S Ganesh Anhydride Ltd. & Ors. Vs. Addl. Chief Judicial Magistrate & Anr.
139
18. This application under Section 482
Cr.P.C. henceforth is allowed.
----------

(2019)12 ILR A139

ORIGINAL JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 03.07.2019
BEFORE
THE HON'BLE SUDHIR AGARWAL, J.

Crl. Misc. Application (U/S 482 Cr. P.C.) No.
14529 of 2004

M/S Ganesh Anhydride Ltd & Ors.
 ...Applicants
Versus
Addl. Chief Judicial Magistrate & Anr.
 ...Opposite Parties

Counsel for the Applicants:
Sri Vijai Prakash

Counsel for the Opposite Parties:
A.G.A., Sri Vipin Saxena

A.
Criminal
Law
-
Negotiable
Instruments Act, 1981- Sections 138,
141 & 142 read with Indian Penal Code,
1860 - Section 420 - The mere fact that
cheque is for a higher amount, will not
dilute the liability of drawer to the
extent
of
amount
which
was
for
discharge of "due debt" or "liability"
stood dishonoured. It cannot be said that
non encashment of cheque to the extent
it was for discharge of due debt and
liability would not come within the
purview of Section 138 of Act, 1981.

Application u/s 482 Cr.P.C rejected. (E-2)

List of cases cited: -

1. Indus Airways Pvt. Ltd. & ors vs. Magnum
Aviation Pvt. Ltd. and anr, 2014(12) SCC 539

2. Sampelly Satyanarayana Rao vs. Indian
Renewable Energy Development Agency Ltd.,
2016(10) SCC 458
(Delivered by Hon'ble Sudhir Agarwal, J.)

1. This application under Section
482 Cr.P.C. has been filed by M/s Ganesh
Anhydride Ltd. and nine others with a
prayer to quash Complaint Case No. 805
of 2004 pending in the Court of
Additional Chief Judicial Magistrate,
Ghaziabad under Sections 138, 141, 142
of Negotiable Instruments Act, 1981
(hereinafter referred to as "Act, 1981")
read with Section 420 IPC and also to set
aside summoning order dated 21.03.2002
as also bailable warrant dated 14.12.2004.

2. Facts in brief giving rise to
present application are that M/s Morgan
Securities
and
Credit
Pvt.
Ltd.
(hereinafter
referred
to
as
"Complainant") has its registered office at
53, Friends Colony, East, New Delhi. It is
a Company incorporated under the
provisions of Companies Act, 1956
(hereinafter referred to as "Act, 1956").
Similarly,
applicant-M/s
Ganesh
Anhydride Ltd. (hereinafter referred to as
"Accused-1")
is
also
a
Company
registered and incorporated under the
provisions of Act, 1956 and Accused-2 to
10 are Managing Director, Directors and
other persons, incharge, and responsible
for conduct of business of Accused-1.
Accused-3, Ramesh Pilani, approached
Complainant for financial assistance to
meet working capital requirement of
Accused-1 by way of Inter Corporate
Deposit (hereinafter referred to as
"Facility for an aggregate amount of Rs.
100 lacs, in one or more trenches, with a
promise that Accused-1 stood guarantor
and repay the money/ amount taken from
Complainant
as
per
the
agreement
executed
between
parties.
Deed
of
Corporate Guarantee was executed on
07.03.2000
between
Accused-1
and
140 INDIAN LAW REPORTS ALLAHABAD SERIES
Complainant.
Complainant-Company
placed two ICD each of Rs. 50 lacs dated
14.02.2000 for a period of 91 days and
dated 07.03.2000 for a period of 90 days.
ICD of Rs. 50 lacks placed on 14.02.2000
was repaid to Complainant but ICD
placed on 07.03.2000 due for repayment
on 05.06.2000 remained unpaid. Notices
and
reminders
were
given
by
Complainant.
As
per
agreement
(Corporate
Guarantee
Agreement)
Accused-1 had undertaken to make
payment without delay, demur or protest
on first demand of the payment of any or
all of the obligations that may become
payable at any point of time, if borrower,
i.e., Accused-1 refuses, defaults, denied,
disputes or fails to pay the lender. After
giving credit on account of sale of shares
pledged to Complainant, a sum of Rs.
37,95,055/- was due on 31.12.2001 in
respect whereof arbitration proceedings
were initiated. Accused-1 issued a Cheque
No. 713308 for a sum of Rs. 1 crore
drawn
on
State
Bank
of
India,
Commercial Branch, Mumbai in favour of
Complainant as a further security for
realization of loan amount. Notice was
given
by
Complainant
on
several
occasions and lastly on 10.11.2001 to
repay outstanding due else Complainant
shall be compelled to proceed to present
Cheque dated 05.12.2001 given for Rs. 1
crore
by
Accused-1.
Ultimately
Complainant presented aforesaid cheque
for realization to its Banker but it was
dishonoured
with
Bank's
remark
"insufficient fund". It is said that this is a
violation of provisions of Section 138 of
Act, 1981 and consequently complaint
was filed. Magistrate taken cognizance of
matter, issued summons and this has been
challenged before this Court.

3. Sri Vijai Prakash, learned counsel
appearing for applicants submitted that
there was no legally enforceable debt or
liability and, therefore, complaint under
Section 138 of Act, 1981 was not
maintainable. He placed reliance on
Supreme Court's decision in Indus
Airways Pvt. Ltd. and others vs.
Magnum
Aviation
Pvt.
Ltd.
and
another,
2014(12)
SCC
539
and
Sampelly
Satyanarayana
Rao
vs.
Indian Renewable Energy Development
Agency Ltd., 2016(10) SCC 458. He
submitted that as per the own case set up
by Complainant, outstanding dues upto
31.12.2001 was Rs. 37,95,055/- but
Complainant presented the cheque of Rs.
1 crore which was given as a guarantee
and larger amount was not a "debt due" or
"liability" for discharge, hence even if the
cheque was dishonoured no proceedings
under Section 138 could have been
initiated against applicants.

4. From the facts discussed above it
is evident that ICD of Rs. 1 crore under
the agreement was given by Complainant
through two transactions of Rs. 50 lacs
each. There was a default on the part of
accused.
For
ensuring
payment
of
outstanding dues in case of any default
there was an agreement between parties to
realize the same through cheque of Rs. 1
crore given by Accused-1 to Complainant
as a Corporate Guarantor. It is true that
outstanding dues were about 30 lacs and
odd but since only one cheque of Rs. 1
crore
was
given
by
Accused-1,
Complainant had no occasion as also
option to present any other cheque except
the aforesaid one.

5. The fact remains that cheque
included the amount of Rs. 30 lacs and
odd which admittedly can be termed as
"due debt" or "liability" for discharge
thereof the said cheque was utilized. If
4 All. Som Prakash Rawat @ Sanni & Ors. Vs. Stae of U.P. & Anr.
141
Accused-1 had given cheque of a higher
amount, it could have been utilized by
Drawer for realization of outstanding
dues, i.e., for discharge of debt or liability
and the mere fact that cheque contains
higher amount, will not dilute the liability
of drawee to the extent of amount which
was for discharge of "due debt" or
"liability" stood dishonoured.

6. Therefore, outrightly it cannot be
said that non encashment of cheque to the
extent it was for discharge of due debt and
liability would not come within the
purview of Section 138 of Act, 1981 and
hence contention that entire proceedings
are illegal and without jurisdiction cannot
be accepted.

7. In the two judgments relied by
applicants there was a clear case of
advance payment of which there was no
supply since contract frustrated for one or
the other reason hence Court held that a
cheque issued as advance payment, unless
liability or debt has accrued, cannot be
construed to have been issued for
discharge of any debt and liability. The
facts of present case are different, hence
both authorities are not applicable to
present case.

8. In the circumstances, I find no
merit in this application. Dismissed
accordingly. Interim order, if any, stands
vacated.
----------
(2019)12 ILR A141

ORIGINAL JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 20.11.2019

BEFORE
THE HON'BLE RAM KRISHNA GAUTAM, J.

Crl. Misc. Application (U/S 482 Cr. P.C.) No.
20843 of 2016
 connected with Crl. Misc. Application (U/S
482 Cr. P.C.) No. 16296 of 2016

Som Prakash Rawat @ Sanni & Ors.
 ...Applicants
Versus
State of U.P. & Anr. ...Opposite Parties

Counsel for the Applicants:
Sri Kamlesh Kumar Dwivedi, Sri Sandeep
Kumar Keshari

Counsel for the Opposite Parties:
A.G.A., Sri Puneet Srivastava

A. Criminal Law - Criminal Procedure
Code, 1973 - Section 482 & Protection of
Women from Domestic Violence Act,
2005- Sections 12, 18, 19, 21 & 22 -to
secure
ends
of
justice,
inherent
jurisdiction has to be exercised carefully
by the tests specifically laid down in the
section itself. (Para 8, 9, 10 & 11)

Domestic Violence Act, is special Act to provide
more effective protection to the right of
women, wherein, Magistrate after exercising
due procedure, has passed impugned order
against which appeal was preferred and this
appeal was decided by appellate court, hence,
there remains nothing for any indulgence, in
exercise of inherent power, under Section 482
Cr.P.C. for assessing judgment of appellate
court, being its second appellate court. (Para
12)

Application u/s 482 Cr.P.C. dismissed. (E6)

List of cases cited: -

1. St. of A.P. Vs Gour Sheety Mahesh J.T.
2010 (6) SCC 588

2.Hamida Vs Rashid (2008) 1 SCC 474,+

3.Monika Kumar Vs St. of U.P. (2008) 8 SCC
781